The insurance and investment giant Old Mutual has raised a Chinese wall over the bidding process associated with what could be Africa’s largest commercial property sale — the V&A Waterfront — for which multibillion-rand bids close on Monday for the parastatal Transnet’s property in Cape Town.
While Old Mutual Properties — understood to be bidding together with the Public Investment Corporation, which has oversight over South Africa’s state pension funds — is among the 80-odd bid documents purchased, it was appointed to undertake the valuation process on behalf of state transport parastatal Transnet and its pension funds, which currently own the prime project — only 55% of which has already been developed.
Any bid could be complicated by the fact that Transnet chairperson Bulelani Ngcuka — husband of Deputy President Phumzile Mlambo-Ngcuka — also has an interest in Old Mutual as part of a black empowerment consortium as well as in Investec, also understood to be a bidder.
Bid documents were provided at the cost of R50 000, which is not returnable.
Others reliably understood to be in the field include a Canadian pension fund, a consortium put together by Goldman Sachs, Zenprop, Investec Growthpoint and the Pretoria company Atterbury.
The Ellerine brothers as well as a new international consortium — called Fabuprop — involving Industrial Development Corporation chairperson and former Vodacom chairperson Wendy Luhabe and Property Partners boss Stuart Chait — formerly of MvelaProp — are also in the bidding process.
It could not be confirmed that Sanlam Property and Hosken Consolidated Investments were part of the bid process, but rumours are rife in the market that they are indeed in the running. Leaders Johnny Copelyn and Marcel Golding could not be reached for comment.
Following the announcement in May of the sale by Transnet chief executive Maria Ramos — flanked by Transnet’s Ngcuka — Old Mutual carried out the valuation procedure of the prime mixed-use property which receives about 22-million visitors a year.
Old Mutual’s valuation manager Trevor King emphasised that he was “bound by fairly serious confidentiality” and he was not involved at all in the sales process. “We have merely done a valuation,” he said, noting that Old Mutual Properties had been involved with the V&A project since 1997. He could not comment on the detail of the valuation or when it would be released.
Investec’s Dave Tew — who is running the sales process on behalf of the Waterfront — also declined to comment when approached. Asked about details of the valuation by Old Mutual and who had submitted bids, he said he could not say anything about the bidding process. “Nothing whatsoever,” he asserted.
A senior Old Mutual executive confirmed that a confidentiality agreement precludes investment teams from having “any contact” with the valuation team or their information. This has been described within the company as a Chinese wall.
When the announcement of the sale of an over 70% share of the Waterfront was made in May, Ramos would not be drawn on what sale price could be expected.
But it is now expected to be in the region of at least R6-billion.
Ramos then reported that potential buyers would be evaluated according to a list of 100 points, of which up to 85 points would be for the actual purchase price, up to 10 points for black economic empowerment and up to five points for the retention of the 750 full-time employees of the V&A Waterfront.
Potential buyers would lose one of the 85 points coming from the qualifying purchase price for every R25-million below the highest price offered. Ramos stressed that a single buyer would be preferred, and offers would only be considered if they were for at least a 25% interest. According to BuaNews, the government news service, the sale was expected to be concluded by September. – I-Net Bridge